Question
An investor wants to invest in A and/or B yet minimize his volatility. Asset A has a volatility of 10%. Asset B also has a
An investor wants to invest in A and/or B yet minimize his volatility. Asset A has a volatility of 10%. Asset B also has a volatility of 10%. The correlation of A and B is -.5 (negative). The investor should:
Group of answer choices
(a) Invest 100% of his money in A
(b) Invest 100% of his money in B
(c) Invest part of his money in A and part in B
(d) Either (a) or (b) will minimize volatility
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Finance For Executives Managing For Value Creation
Authors: Gabriel Hawawini, Claude Viallet
7th Edition
1473778913, 978-1473778917
